President Obama recently signed into law a $787 billion stimulus package on top of Bush's grossly mismanaged $700 billion TARP bailout from last September. Several weeks ago, the Federal Reserve basically printed an additional $1,000,000,000,000 to inject more funds into the monetary system which will undoubtedly have the effect of diminishing the purchasing power of the dollar. Since last fall, the government has paid out trillions of dollars in bailouts, handouts, loans and giveaways, with no end in sight as our leaders try anything and everything to try and get our spiraling economy under control. While some of what Washington has already done may act to stimulate the economy, much of the trillions of dollars already spent will, no doubt, turn out to be just money wasted.
Tax rebate checks do not stimulate the economy - history shows that people either spend such rebates on paying off credit card debt, or they simply save them, doing little to nothing to stimulate the economy. Presumably, that is why they were removed from the final version of the stimulus bill. The tax cuts that were included, however, amount to a whopping $44 per month for the rest of 2009, decreasing to an even more staggering $33 per month in 2010. This is hardly "relief" as it is likely to help nobody.
The Wall Street financial institutions, auto manufacturers, insurance companies and countless other irresponsible actors have now received TRILLIONS of taxpayer dollars(as demonstrated above, that's a number with *12* zeros at the end of it) to bail them out of their self-created mess. This, too, does nothing to stimulate the economy. It merely rewards bad behavior and does nothing to encourage institutional change. There is a better way.
How many times have we heard from our leaders in Washington that education is the key to solving all of our underlying societal problems? The so-called "Silver Bullet." For decades, presidents, senators and members of Congress have touted themselves as champions of education, yet they've done nothing to actually encourage the pursuit of one on an individual level.
Some of us have taken advantage of Federal Stafford Loans and other programs, including private loans, to finance higher education, presumably with the understanding that an advanced degree equates with higher earning power in the future. Many of us go into public service after attaining such degrees, something that's also repeatedly proclaimed as something society should encourage. Yet, the debt we've accrued to obtain such degrees have crippled our ability to reap the benefits of our educations, causing many to make the unfortunate choice of leaving public service so as to earn enough money to pay off that debt.
Our economy is in the tank. There isn't a reasonable economist alive who doesn't believe that the economy needs stimulating immediately. The only debate now centers on how to go about doing it. While the new stimulus plan contains some worthy provisions, very little of it will have a significant and immediate stimulating effect on the economy. The Obama Administration itself doesn't expect to see an upsurge in the economy until mid-to-late 2010.
Instead of funneling billions, if not trillions of additional dollars to banks, financial institutions, insurance companies and other institutions of greed that are responsible for the current economic crisis, why not allow educated, hardworking, middle-class Americans to get something in return? After all, they're our tax dollars too!
Forgiving student loan debt would have an immediate stimulating effect on the economy. Responsible people who did nothing other than pursue a higher education would have hundreds, if not thousands of extra dollars per month to spend, fueling the economy now. Those extra dollars being pumped into the economy would have a multiplying effect, unlike many of the provisions of the new stimulus package. As a result, tax revenues would go up, the credit markets will unfreeze and jobs will be created. Consumer spending accounts for over two thirds of the entire U.S. economy and in recent months, consumer spending has declined at alarming, unprecedented rates. Therefore, it stands to reason that the fastest way to revive our ailing economy is to do something drastic to get consumers to spend.
This proposal would quickly revitalize the housing market, the ailing automobile industry, travel and tourism, durable goods and countless other sectors of the economy because the very people who sustain those sectors will automatically have hundreds or, in some cases, thousands of extra dollars per month to spend. The driving factor in today's economy is fear. Unless and until the middle class feels comfortable enough that they'll have their jobs, health insurance and extra money to spend not only next month, but the month after that, etc., the economy will not, indeed, cannot grow fast enough to stop the hemorrhaging.
Let me be clear. This is not about a free ride. This is about a new approach to economic stimulus, nothing more. To those who would argue that this proposal would cause the banking system to collapse or make student loans unavailable to future borrowers, please allow me to respond. I am in no way suggesting that the lending institutions who carry such debts on their balance sheets get legislatively shafted by having them wiped from their books. The banks and other financial institutions are going to get their money regardless because, in addition to the $700 TARP bailout, more bailout money is coming their way. This proposal merely suggests that in return for the trillions of dollars that has been and will continue to be handed over to the banks, educated, hardworking Americans who are saddled with student loan debt should get some relief as well, rather than sending those institutions another enormous blank check. Because the banks are being handed Trillions of dollars anyway, there would be no danger of making funds unavailable to future borrowers.
To avoid the moral hazard that this plan could potentially create, going forward, the way higher education in this country is financed MUST be reformed. Requiring students to amass enormous debt just to receive an education is an untenable approach, as demonstrated by the ever-growing student loan default rates. Having a loan-based system rather than one based on grants and scholarships or, ideally, public funding, has, over time, begun to have the unintended consequence of discouraging people from seeking higher education at all. That is no way for America to reclaim the mantle of the land of opportunity.
A well-educated workforce benefits society as a whole, not just the students who receive a higher education. It is often said that an undergraduate degree today is the equivalent of a high school diploma 30 or 40 years ago. Accepting the premise as true that society does, in fact, place the same value on an undergraduate degree today as it did on a HS diploma 30 or 40 years ago, then what is the rationale for cutting off public funding of education after the 12th grade? It seems to me that there is some dissonance in our values that needs to be reconciled. That, however, cannot come to pass until the millions of us already shackled with student loan debt are freed from the enormous economic burdens we're presently carrying.
Many of the vocal nay-sayers to this proposal seem intent on ignoring the fact that Washington IS going to spend trillions of dollars, likely in the form of handing blank checks over to more and more banks, as a way of getting the economy under control. Normative assessments of how things should be are fine, but they don't reflect reality. Accepting the premise that Washington will spend Trillions of dollars in unprecedented ways (a good portion of which will just be trial and error, since we're in uncharted waters), what is the argument against directly helping middle class people who are struggling, rather than focusing solely on the banks and other financial institutions responsible for crisis to begin with?
Further accepting that there is an aggregate amount of outstanding student loan debt totaling approximately $550 Billion, (that's Billion with a B, not a T), one is forced to ask again, what is the objection to helping real people with real hardships when all we're talking about is a relative drop in the bucket as compared with what will be spent to dig us out of this hole?
In a perfect world, I share these biases towards personal responsibility and having people pay back what they owe and making good on the commitments they've made. But we don't live in a perfect world and the global economy, not just the U.S. economy, is in a downward spiral, the likes of which nobody truly knows how to fix.
This proposal will immediately free up money for hardworking, educated Americans, giving them more money in their pockets every month, addressing the very real psychological aspects of the recession as much as the financial ones. Is it the only answer? No, of course not. But could it help millions of hardworking people who struggle every month to get by? Absolutely. Given the current economic climate, as well as the plans to spend trillions of additional dollars that are in the works, one must wonder what is so objectionable about giving a real helping hand to real people with real struggles.
2009 and the new Obama Administration is supposed to be about change. Nothing in the new economic stimulus package represents a significant departure from the way Washington has always operated - it's merely a different set of priorities on a higher scale, but it's certainly not materially different from any other economic stimulus package passed during the past few decades. Washington cannot simply print and borrow money to get us out of this crisis. We The People, however, can get this economy moving NOW. All we need is relief from debt that was accrued under the now-false promise that higher education equates with higher earnings.
Free us of our obligations to repay our out-of-control student loan debt and we, the hardworking, middle-class Americans who drive this economy will spend those extra dollars now.
If you believe that there's a better way of climbing out of this economic crisis, one that empowers us to directly spend money, start businesses, free up credit and create jobs, then please join this group and encourage others to do so as well. There's strength in numbers - the more people to join this group, the louder our voices and the greater the chances of being heard by President Obama and Congress.
Support real change we can believe in!
My student loan interest is 8.25%. These younger people yell and scream about their 3-4%. Mine was $60K now it's $123K and growing. Even though I paid the bill, it still accrued $5400 in interest. I also lost $40K in salary money. Now I can't even afford to put money in a 401K even though I'm almost 60.
I write on the side trying to sell books and my screenplay. I work at home part time formating ebooks. Now I'm trying to see if I can legally take hours off my employer's 40 hour week to pay equal to the student loan bill which they won't pay in enough salary to pay the bill but they can hire high school dipolma's and offshore labor for me to have to work with. If they pay for a new student loan then why aren't employer's having to pay for the old student loan that has to train the high school dipolma's? Well it takes a college degree to figure that out.......D.A. Karr, Amazon.com
Let me provide some insight into why I believe at minimum we must address the cost structure of education and potentially the debt situation. I will use examples from medicine because this is my field. In brief and then expanded below if you want more detail.
#1 Costs and debt for Americans in the system is out of control, higher than ever before.
#2 It shifts the career focus from patients to pocketbooks. That debt distorts the job market away from needed workers and skews the whole healthcare system toward increasing expense.
#3 A consequence of this is foreign medical workers are at the gates of healthcare, making primary care decisions with little experience of our system or culture. This can lead to errors, misunderstanding and poorer quality care.
#4 This system puts Americans and the country as a whole at a competitive disadvantage. Foreign medical graduates can begin to save quickly for returning home and take away subsidized training positions, shifting expertise away from the US. It also takes investment and funding out of the US when we need it the most.
#1 Costs of education adjusted for inflation are the highest they have ever been and wages have not increased comparatively. A senior neurosurgeon in my hospital tells me he graduated med school with approximately $5000 of debt. Today, we typically graduate with >$170000 of debt for a similar education. Wages adjusted for inflation have not increased anywhere near the same rate as debt has.
#2 These jobs, as many are, happen to be a labor of love. However, they are skewing the workforce and the mentality of graduates. Firstly, american medical graduates have shunned primary care even thought the compensation is first rate among american jobs. This is because the debt burden forces us to think in terms of debt repayment and not the jobs we love. It also skews graduates out of the highest end specialties. Here is an example, a neurosurgery trainee with have a wage of 30k/yr for 8 years after medical school after taking out basic repayments. So, the debt burden shifts the focus of students away from better care (both primary care and difficult specialties) and focuses it on high paying short training areas. (Its no wonder dermatologiy is the #1 choice of graduates, despite the limited utility for improving overall care and efficiency). In Australia the primary to specialty % is 80-20% but in the US it is flipped at 20-80%. We overspecialize away from caring for families.
#3 Based on #2 above, primary care jobs (which pay well if you take out the debt burden) are almost exclusively falling in the hands of foreign graduates from India, China and Pakistan. We may be lucky to have them, but if education was more affordable we might be able to train more home grown doctors. Keep in mind, the debt of Indian graduates is usually less then 5k compared to american students 170k average. So this is who we preferentially put at the gates of care for our grandmothers. These residents positions are all partly subsidized by the govt, so foreigners get these good jobs and starting saving and earning advantageously over american graduates that choose the same specialties. They have a significant advantage over americans based on the cost of education and the debt burden. We may be lucky to have immigrants in many instances, but I can also say from experience, they often leave the US to return home after a few years and deepen the workforce hole we are in. This leads me to ….
#4 We are entering a time of global competition with countries where education costs are miniscule by comparison. Yet, in the end, we compete for the same jobs. Should we both get a job, Americans are left in a hole for years while foreigners can stack up savings and take them back overseas, taking their skills with them. We are not as mobile or financially nimble as they are to make investments in local projects or hire more workers. Simply put, the situation disadvantages Americans who want to compete and save money to hire american workers. Instead should a foreign graduate wish to get subsidized training, save $ and leave, the system is just what the foreign doctors and governments ordered! By doing nothing about debt and education costs we are disadvantaging American doctors and our own country! At minimum, we need to acknowledge the extent of the problem. Then, together we can find a solution that values self reliance and fair competition.
As a RN, every word you have said is exactly how Health Care in America is. Thank you for such a detailed description. I have shared your post because there is definitely no better way I could have said this. You should be a Speaker for the Health Care workers.
Thank you so much for your empowering words
Not all of us went to school for careers that pay a as much as pilots. I went into school knowing that the job I was going to get would not easily pay for my education. The professionals that educate and look after your children spend more time with them than you do. Those are the people that can't afford their school loans, rising healthcare costs, rising cost of living, etc. We haven't received so much as a cost of living increase in 6 years. Our health insurance premiums and copays have sky rocketed. The most qualified, competent people are leaving the public servant arena because they can't afford to support their families. Who is going to be left to educate your children?
This isn't about creating jobs or bringing us out of a recession, this is about the fleecing of America. Do you really expect taxpayers to foot your higher educational bills? This is what is destroying such a great nation and turning it into an entitlement state. You are not a part of the solution, you are a part of the problem. I took out thousands of dollars in student loans to pay for my flight training and by God I have paid them back on my own. Our country has turned into a bunch of crying babies that want to be bottle fed the rest of their lives so they won't have to do shit. You think the people who work hard and have earned their money will continue to pay more taxes so lazy asses can get a free ride? NO!. Even ants have more self-pride and preservation, at least they work and earn a place in their society, not by sapping off of others.
Let’s cover some facts so the rest of us can understand your comments dated June 1, 2012.
I am guessing one of these assumptions to be true.
Either you became a pilot in 1967 or you were born in 1967.
According to the Bureau of Labor Statistics the purchasing power of the dollar in 1967 was 2.933. That would mean for every dollar you spent you, in essence, received products totaling $2.93. Not bad!
1987 = .880 or $0.88 cents
In 2010, that same dollar allotted for the purchasing power of 0.459 or $0.46 (ouch).
I won’t assume either a four year degree or a two year degree. (normal course time for flight school = 2 years)
Let’s look at those numbers.
Four Year Degree (public)
1967 = $748.00
1987 = $3,499
2009/10 = $21,189
2012 = $50,000
Two Year Degree
1967 = No Data
1987 = $2,230
2009/10 = $8,533
2012 = 10,688
Average Wages (only one adult working)
1967 = $7,300
1987 = $30,056
2012 = $36,000
I would assume that you were not in the military based on the comment, “I took out thousands of dollars in student loans to pay for my flight training and by God I have paid them back on my own.” The military trains you at no cost, plus you earn a little. There is also the GI bill to help foot the bill. I didn’t hear mention of this. Pardon me if I am wrong and thank you for your service. If you are, or have been, realize that those were tax payer dollars funding you and that fabulous plane.
Here are a few facts that might be of interest to you:
“Ultimately, the federal government provided $4.6 billion in one-time, subject-to-income-tax cash payments to 427 U.S. air carriers, with no provision for repayment, essentially a gift from the taxpayers.”
“American Airlines, whose parent company filed for bankruptcy in November, said this week that it wants to terminate its four pension plans for 130,000 workers and retirees and ask the federal government’s Pension Benefit Guarantee Corp. to bail out its unfunded pension obligations to the tune of $9 billion. It would be the largest PBGC bailout ever.”
“The U.S. has been Haiti's largest donor since 1973. Between FY 1995 and FY 2003, the U.S. contributed more than $850 million in assistance to Haiti. Since 2004, the U.S. has provided over $600 million for improving governance, security, the rule of law, economic recovery, and critical human needs. The President's budget request for FY 2007 was $198 million. U.S. Government funds have been used to support programs that have addressed a variety of problems.”
Additional information on U.S. assistance to Haiti can be found at
Read more: Haiti http://www.infoplease.com/country/profiles/haiti.html#ixzz1zc1AE28P
No one here is asking for a handout, rather some help.
So maybe the best thing for you to do on this 4th of July is appreciate the hand-outs you have received thanks to people like me and many others.
I might also suggest that if you enjoy Haiti and the people as much as you say, then maybe the next best thing is to join them. You might have to give up your pension and Social Security, but you don’t seem like the kind that would mind too much.
To my fellow Americans, thank you for thinking of me and looking out for each other. You remind me of what makes America great.
A special salute to our soldiers, wherever they may be, I hope it’s a wonderful 4th of July.
I paid cash for my AA and BS degree, but after a brutal divorce that left me strapped, I took out a small student loan to achieve a Master's (Organizational Leadership)degree so I could get a HIGHER PAYING JOB. First: to the pilot; the small percentage of the population, like me, who are driven to complete a higher education do not only have a work ethic just long enough to get through school, it is ingrained in us. We work very hard for everything in our lives, not only our college degrees...you are very narrow minded, and ignorant to call us all "lazy asses" in a blanket statement.
I still have a very strong work ethic, and a very postive work history. What I don't have yet is a full-time, career-type job that pays me enough to make my loan payments, rent payments (I rent a room, no home) and pay for food. God bless the local food banks. I have applied for more than 400 jobs since Nov 2007, and have the blessing, and expense, of going all the way to final interviews, but do not get hired. I'm now 58 years old. I'm sure this is the 'unspoken issue.'
I am a sub-teacher, a realtor and former business owner/developer, and have been working since I was 12. My loan has doubled in only four years, due to interest and fees. Most of us would be more than willing to pay off our loans, if we had the type of employment we anticipated when we went into our programs. I would PREFER to pay off my loan, as I am a person of integrity and values. But my credit is damaged, so I cannot get a small-business loan to start a new business, thought I am thoroughly qualified to do so. Real estate market is still in a slump, and it is a "pay-to-play" profession. I have worked as hard at getting a full-time, permanent job as I have worked at everything else I do, and I have paid taxes for over 40 years. Have voted since I was 18. So I am not asking for a hand-out or a free ride, and I am far from lazy. I would just like fair lending practices. I also had a predatory home loan, that just settled litigation. There is something wrong here...and we, the people, have the responsiblilty to hold our public servant-leaders accountable for this warped education-lending system.
Do you really expect taxpayers to foot your higher educational bills? This is what is destroying such a great nation and turning it into an entitlement state.
You claimed that you took out student loans as well, is that correct? I also assume that some of these loans were government loans? Right? Well, while you were getting your pilot's training, taxpayers were the ones who were footing your higher education costs. So it's okay for you to get an education but not for a new generation of students who didn't face the same problems that you did? Is there any way you could be more hypocritical and selfish? Your unearned sense of entitlement is what's destroying this "great nation." Not the students who currently face the biggest tuition hikes this country has ever seen. Following your logic, since I pay taxes too, should I demonize and insult those who are asking relief in terms of students loans? You seem to confuse the concept of "debt relief" with "government bailouts," the latter I'm sure you vehemently supported all throughout its creation and implementation when the USG was on its fear-mongering campaign at the end of Bush's II second term.
You are not a part of the solution, you are a part of the problem. I took out thousands of dollars in student loans to pay for my flight training and by God I have paid them back on my own.
You're a pilot? Okay, that means you had to borrow between $50,000 and $100,000 to pay off your loans. Given the seething hatred towards reconciliation of any sort and a pious sense of entitlement, this is probably one of your life's greatest accomplishments. Nothing to write home about.
What you fail to understand is that to pay for a meaningful education that's not going to leave you with a $75,000 salary at the end of your career, the tuition cost of some the top end universities/colleges range between $40,000 - $52,000 per year -- this cost could be even higher if an individual were to live on campus both of their freshmen and sophomore years (none of the figures I've provided include the extra money parents have to dish out for additional living expenses). Your experience is just that: your own experience. You have no clue of the background and the hardships affecting the majority of college students. By making broad and sweeping generalizations that students don't want to pay back amounts of debt that are almost criminal in nature, you're literally spitting in the face of people who expect to get the same help that you did. I guaranteed you that if you were on the receiving end of these loans, you'd be begging for some kind of debt-relief opportunity -- I know how bad the airline/travel/flight industry currently is right now; you'd be the perfect candidate for whom these debts would hurt you the most for the next 2 to 3 decades of your life.
Our country has turned into a bunch of crying babies that want to be bottle fed the rest of their lives so they won't have to do shit. You think the people who work hard and have earned their money will continue to pay more taxes so lazy asses can get a free ride? NO!.
And there is where your entire rant cemented you as a complete idiot (I don't know who's the bigger idiot... you or me for actually taking time to answer to your inane rant). Since you didn't read the FAQ, let me make this clear to you: nobody's asking for a free ride. Nobody's asking for a hand-out. Nobody's asking to get paid $200,000 per year while sitting in a cubicle and twiddling their thumbs all day long. We're asking for fairness of opportunity to pursue our studies (just like your selfish, entitled, disgruntled ass did) without being forced to sign predatory and aggressive loans.
Adding insult to injury, because of our promise to re-pay these ridiculous amount of debts that not even a loan shark would be comfortable giving you, we are forced to work in industries we necessarily wouldn't want to work in. Here, let me put it into a perspective you should be able to understand: imagine if you had spent all this money and effort on your pilot degree/license only to end up working for Sallie Mae as a Business or Financial Analyst.
This exact scenario happens all the time and it is disastrous on so many levels, I'll just give a high-level insight about what's going on in the academic world so even you can understand: let's use students who are enrolled in math and science at our top universities (Cal Tech, MIT, Stanford, Berkeley, Virginia Tech, etc). The best and brightest of our nation who graduate as math majors, for example, don't go out and become high school math teachers in poor areas, or become university professors in community colleges, or join NASA to advance space technology for the militarization of space (unfortunately) where technological advances trickle to civilian technology. Do you know where they end up? Working as financial analysts for the exact same corporations they owe their students debt to.
The educational system has long stopped serving an educational purpose; rather, it has become a training facility to fill in the few service-based jobs that are available in an economy where companies do not compete on the basis of their manufacturing, goods, or services they offer but rather on the efficiency of their business processes. This is where the money is at. This is where the "future" of the high-tech and service industry is moving forward in the U.S. More and more traditional functions within your ordinary corporation are being automated and soon, only the very necessary positions will remain. Even your position is in danger. I'm sure you've heard about drones, correct? Well, guess what the U.S. military is currently working very hard for? Automated fighter planes! Yay!
This nefarious environment kills creativity, pigeon-holes students into high-paying, destructive positions (default credit swaps anyone?), and discourages the majority of students to pursue their desired realm of study (you want to major in Liberal Arts, History, Literature, or Classics? Well, sure! Have fun gambling your future by borrowing hundreds of thousands of dollar to land in a job market with absolutely no offering -- just kidding, there is no job market for the majors that I've cited).
Even ants have more self-pride and preservation, at least they work and earn a place in their society, not by sapping off of others.
I think the Ant Queen would disagree with you when it comes to sapping off of others -- even ants have a class-based society, isn't that marvelous?
I'll just leave it at that. I think you've embarrassed yourself enough by showing how little you understand about this debt-bubble that is being created before your very own eyes.
Students should give up hope that student loans will ever be forgiven because the population of elderly are increasing and they will never allow anything to interfere with the entitlement system. The banking cartels have also thoroughly captured the checks and balances of our government. One bold strategy is a mass debtor's strike on student loan payments to try and threaten the solvency of the lending institutions. However, a large number of existing stakeholders are too intimidated to join such an action. And the debt is fluid enough to be transferred between an endless pool of debt collectors.
American students should either emigrate or join the momentum to default on the US debt. Once we default and the dollar is destroyed along with the finance, insurance and real estate sectors, our creditors will impose IMF-style "structural adjustments." Some of these adjustments involve minor "alterations" in the sovereign status of important resource-rich states and cities with critical infrastructure. By "critical" I mean the systems necessary to transport large volumes of oil, coal, liquified natural gas, agricultural products, timber and other minerals to the ports where foreign companies will pay currency with actual exchangeable value.
These privatized cities will not care about an individual's previous credit history, diplomas or occupational credentials. They will hire local Americans using their own testing standards and criteria. They will not recognize laws involving the National Labor Relations Board, the American Medical Association, pharmaceutical or software patents or any other rent-seeking arrangement from the pre-Default days. Education will involve low-cost tele-presence lectures and leased laboratory facilities. There will be no more tenure, football teams with million-dollar coaches or binge drinking.
I do not believe in forgiving student loans. That path would leave the same structure of usurers in place. I believe in collapsing the entire system. A fresh start. If Americans want to see any resembling Social Security, Medicare or their pensions in place when they retire, they will be wise to offer incentives for this generation to remain loyal to the system. Otherwise you give them no reason to stick around.
They will hire local Americans using their own testing standards and criteria. They will not recognize laws involving the National Labor Relations Board, the American Medical Association, http://www.juegos-yepi.info/ pharmaceutical or software patents or any other rent-seeking arrangement from the pre-Default days. http://www.yepi100.net/ Education will involve low-cost tele-presence lectures and leased laboratory facilities. There will be no more tenure, http://www.kizi-games.com/ football teams with million-dollar coaches or binge drinking.